Whatever Singh may say, it's natural that unions would feel bolder when they witness a high-profile dispute that compels the CM to broker a deal in favour of the union—as happened at Honda. So, AEEU created trouble at the Faridabad-based German agriculture equipment maker Claas India, which earlier had a joint venture with Escorts. The problem in Claas India started when its workers continued to be affiliated to AEEU even after Escorts sold its 51 per cent stake. And this is despite the fact that N.K. Chaturvedi, head (HR and IR), Claas India, says he's willing to "talk to the workers only if they come out of the union. The union's decision to retain members from a company that's no longer a part of the group is incorrect and unacceptable even to the registrar of trade unions, Haryana," he adds. Two other Faridabad-based MNCs—Yamaha Motor and JCB—which went through similar problems when Escorts exited from the respective joint ventures, could soon see a resurfacing of the old issues.
At the core of the recent disputes is the fact that MNCs and some Indian private sector firms are wary of labour unions. Most of them don't want unions in their factories. According to K.K. Swamy, deputy MD, Toyota Kirloskar Motors, the company was unwilling to allow politically motivated outside forces to act as intermediaries. "Our workers are the best paid in the industry and issues like healthcare and education are very well taken care of," he says. Other MNCs echo the sentiments. LG and Samsung discourage trade union activities in India.
"Unionism is irrelevant in a company like ours. All employees are well-educated and know there is a performance-related reward system, and nothing significant can be achieved through collective protests and strikes," says Yasho V. Verma, senior VP (HR), LG India. Although employees are allowed to form unions as per law, LG is quick to get rid of employees who could prove to be "trouble-makers". "When workers know the management is listening to them and implementing what they want, the need for organised unions diminish," says Ashok Sehgal, GM (HR), Samsung India. To further reduce the chances of labour issues, Samsung has employed women.
Another Korean giant, Hyundai Motor India Ltd (HMIL), has done away with the conventional union. Instead, it has committees comprising both workers and management, which discuss issues like productivity and quality. Even Walmart, the $288 billion corporation, has prevented its Indian employees from being part of any organised union. Agrees Sachdeva, "The Honda workers were bitter because their requests to form a union had been stalled by the management. Companies like Honda and Toyota think they are above the law." MNCs like Honda even go to the extent of threatening to relocate their units to other states if workers' aggression is unchecked.
Apart from the MNCs' paranoia about unions, cultural differences play a role in creating labour tensions. For example, in the case of the Honda incident, a senior Japanese executive manhandled workers and abused a Sikh employee. "To avoid such situations, we do not employ expat managers at shopfloors," says Vipin Sodhi, MD, Tecumseh India, the subsidiary of the US-based compressor manufacturer. "Most of the recent labour incidents happened at Japanese firms. It shows that they display a degree of cultural and economic arrogance. None of the major Japanese firms in India have a clean record of industrial relationship management," says B.V.R.Subbu, president, hml.
In the end, it's the growing arrogance of the management in the past few years—especially after economic reforms and the increasing loss of jobs—that's forcing workers to go on the offensive. For the political party-affiliated unions, it's the loss of clout, which will only become more acute if labour reforms gain root in India, that's forcing them to play out their last cards. As the divide between management and workers grows, it's bound to impact India's aim to become a global manufacturing hub.
